The Economic Crisis

Posted: November 27th, 2013

The Economic Crisis

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Introduction/Thesis: The U.S economy is in a crisis that is spreading beyond the most important mortgages, real estates, bonds and other forms of liabilities.

I. Causes of economic crisis

A.  The decline in profit is one among the many factors that have caused the current economic crisis in the United States

1. The crisis is spreading beyond the most important mortgages, real estates, bonds and other forms of liabilities.

2. A third of the bank capital is in money owing.

B. Effects of the economic crisis

1. The workers have to work into old age to cover a contented retirement leaving no jobs for the growing number of unemployed youth in the country.

2. The recovery of the US profit rate has been generally done at the expense of the workers.

II. The mortgage crisis has now had its widespread into the financial markets in general.

A. This slowed down the fiscal activity in the country.

1. Due to these outbursts, the financial crisis played part in their ability to lend.

2. There were dramatic collapses in the government and many other monetary firms that were jeopardized

Conclusion/Closing: Despite the empty promises that have been given to people, the economic crisis remains.

There seems to be no hope for this current state of the crisis.

To date, the joblessness level in the country estimates to 10% of the population

The Economic Crisis

Introduction

The U.S economy is in a crisis that needs a boost. An economic crisis can be defined as the case where the financial stability of a country experiences an unexpected declination because of the monetary state of the country. Many US families are hurting due to this overwhelming economic catastrophe. There is a high rate in terms of occupation loss, high oil and food prices, declining of the dollar and unemployment. This catastrophe is seen as the worst since the Great Depression (Rosenberg, 2010). This crisis was influenced by the home mortgage markets leading to a quick decrease in bank lending causing a severe depression. A number of factors have contributed to this disaster. The crisis is spreading beyond the most important mortgages, real estates, bonds and other forms of liabilities. A third of the bank capital is in money owing. There are various causes and effects of the economic crisis.

Causes of economic crisis

            The decline in profit is one among the many factors that have caused the current economic crisis in the United States. As we look over back to the post Second World War era, it is clearly indicated that the performance in the decline of the US economy is shown in the recent decades. The major decline in the rate of the profit is almost 50% to around 12%. This is seen between the 1950’s to the mid 1970’s (Cornelius, 2010). This decline reduced unemployment by expansionary monetary and economic policies. These policies generated the higher rates of inflation. By the 1980’s the financial capitalists appalled against the higher inflation rates and forced the government to take on the preventive strategies. Government policies have affected the unemployment and inflation at different times within the recent decades.

Effects of the economic crisis

The same causes of the previous crisis in the mid 1970s are an influence to what the US is facing today in terms of economic catastrophe. Capitalists have tried to reinstate the rate of profit in a number of ways. A cut in the health insurance and retirement benefits are some of the tried ways to restore the profit rate (Rosenberg, 2010). This is sad because the workers are forced to pay higher payments to cover the health insurance. The workers have to work into old age to cover a contented retirement leaving no jobs for the growing number of unemployed youth in the country. The recovery of the US profit rate has been generally done at the expense of the workers.

Unfortunately, with this much aggression to recover the profit rate, business investments in the US have gone down. The rate of unemployment has not improved. As much as the efficiency of the working generation of American men and women remains a world standard, this does not reflect on the current crisis that started to rupture out in 2006. The mortgage crisis has now had its widespread into the financial markets in general. Due to these outbursts, the financial crisis played part in their ability to lend. This slowed down the fiscal activity in the country. There were dramatic collapses in the government and many other monetary firms that were jeopardized (Cornelius, 2010).

The dollar is the currency of choice for worldwide trade and commerce since the Second World War. Despite having lubricated the global financial system for a long time, a growing number of people and economies have lost confidence on the dollar spreading to the rest of the world. The perception of America has changed over time due to the economic crisis; the US working class has not yet come to terms with the changes that have occurred in the recent past. There has been a boom in prices of the most common of prices. In the year 2000, huge losses were recorded to shareholders in the stock market (Rosenberg, 2010). This loss led to a reduction in the economy recession that makes the big names in the stock market to turn to the state for assistance in the fiscal problem that was facing the business sector, leading to the big catastrophe.

Conclusion

However much a central deliberated intrusion to pay a debt has been reinforced, there were worse economic conditions that exceeded the most cynical estimates. This has become the norm since the outburst that saw the evolution to capitalism as an answer to the crisis that had fallen on the US monetary system. This is what the government is facing each passing day. Despite the empty promises that have been given to people, the economic crisis remains. There seems to be no hope for this current state of the crisis. To date, the joblessness level in the country estimates to 10% of the population (Rosenberg, 2010). It has been so hard to persuade someone that there are better days to come.

References

Cornelius, W. A. (2010). Mexican migration and the U.S. economic crisis: A transnational perspective. La Jolla, CA: Center for Comparative Immigration Studies.

Rosenberg, J. M. (2010). The concise encyclopedia of the great recession, 2007-2010. Lanham: Scarecrow Press.

Wolff, R. D. (March 01, 2002). The U.S. Economic Crisis: A Marxian Analysis. Rethinking Marxism, 14, 1, 118-131.